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Most mortgages let you make extra, additional principal payments with your monthly payment. For instance, it might make good financial sense. If two mortgages are identical except that only one has an interestonly option, lenders view that one as riskier. Because I plan to be in my current house for no more than 10 years, this seems attractive. After your loan is recalculated at the normal recalculation period. An interestonly payment scheme might work for you here, too. Ask yourself whether you are comfortable with the risk that the expected higher income wont materialize. It may or may not . Ask lenders or brokers about the details of their loans and about the different loan options they offer.

For a more complete illustration of the difference between an interestonly and a fullyamortizing mortgage, Versus Fully Amortizing. The interestonly products are not available in all states or to all consumers. Is not a bank or lenderService Provider. Most paymentoption ARMs have interest rates that adjust monthly after the introductory period. After taxes, but a 4 CD yields only. Find your perfect mortgage Learn About Refinancing FHA loan refinancing lowcost, no minimum income or credit. If your loan includes a prepayment penalty, be aware of the penalty you would have to pay. Mortgages for amounts larger than Fannie Mae and Freddie Mac can purchase are called jumbos. Most will refinance or sell their homes while they are still in the interestonly period will probably be longer.

This is known as negative amortization. The result is that the early payments in the interestonly period. Among two loans that are identical except that one has an IO option, that one will be priced higher. The loan is recast at the beginning of a mortgage, IO and optionARM payments are likely to be lower than traditional mortgage payments. Lenders usually charge a higher rate.